From Service to Solution: Mastering the Art of Productizing IT for Growth

What do Arity, MindSphere, EcoStruxure, AWS, Autopilot, Optum, Navify have in common? There are all examples of successful IT products adapted from internal IT solutions for broader market applications, as evidenced by metrics like user adoption, industry deployment, and market positioning.

We have determined so far that Information Technology is a business, and that it makes money.  

What do Arity, MindSphere, EcoStruxure, AWS, Autopilot, Optum, Navify have in common? There are all examples of successful IT products adapted from internal IT solutions for broader market applications, as evidenced by metrics like user adoption, industry deployment, and market positioning.

We have determined so far that Information Technology is a business, and that it makes money.  

Every company begins as an idea first, a solution to a problem, an opportunity that makes business sense to continue and thrive.  With this business objective, Information Technology takes on the role of an enabler – in some cases it provides the data needed, or infrastructure, or interface to a business process such as a website, or mobile app.  As we have also seen, the investment in IT bears returns over time – not only to support the business, but also in terms of the intellectual assets developed.  This creates technical debt, but it also creates opportunity to be harvested.  

This blog sets the stage for a comprehensive exploration of the concept of productizing IT, outlining its significance, process, and potential impact on various stakeholders in the business and technology realms. In the following sections, we’ll take a closer look at how businesses are turning their IT capabilities into products, the strategies they employ, the obstacles they overcome, and the success stories that inspire others to follow suit. Whether you’re an IT professional, a business leader, or simply an enthusiast of technology trends, understanding the dynamics of productizing IT offers valuable insights into the future of business and technology.

The transition to productizing IT services reflects a significant shift in the technology industry, where the value is increasingly measured not just by the capabilities of the technology itself, but by how it is packaged and delivered to end-users. This trend is set to continue, with AI and cloud computing playing central roles in the future of productized IT services.

• Concept of Productizing IT: Refers to the transformation of bespoke IT services into standardized products that have a wide market appeal and can be sold to multiple customers.
• Evolution from Tailored Solutions: Initially, IT services were custom-built for specific business needs. Over time, the rise of shared business challenges led to the opportunity for standardization.
• Influence of Personal Computing: The widespread adoption of personal computers necessitated the creation of standardized software solutions, such as Microsoft Office, that catered to common productivity needs across industries.
• Cloud Computing Breakthrough: The advent of cloud computing was pivotal, with companies like Amazon Web Services offering computing resources and infrastructure as standardized services, radically changing the IT service delivery model.
• Rise of SaaS: The emergence of Software as a Service (SaaS) marked a shift towards providing software applications via subscription models, further streamlining the productization of IT.
• Accessibility and Democratization: Productized IT has democratized access to sophisticated tools, enabling smaller businesses to compete with larger ones by utilizing similar technologies.
• AI and Machine Learning Impact: Advancements in AI and machine learning are leading to a new class of IT products that can adapt to user behavior and improve over time, further blurring the lines between products and services.

The journey from service to product requires identifying viable IT services, skillful development into user-friendly products, and strategic pricing. Successful productization can lead to substantial business growth and market expansion.

• Identifying Marketable Services:
  • Select IT services with broad appeal across industries for productization.
  • Evaluate services for potential standardization and mass-market adoption.
• Development and Packaging:
  • Develop a user-centric interface for ease of use and accessibility.
  • Package the product for optimal delivery, considering cloud and local deployment options.
  • Create a strong brand identity that highlights the product’s unique value proposition.
• Pricing Models:
  • Consider a subscription-based model for continuous revenue and customer retention.
  • Explore a freemium approach to attract a wide user base, with premium features for advanced users.
  • Implement tiered pricing to cater to different market segments, from small businesses to large enterprises.
• Example: Slack’s transition from an internal communication tool to a leading collaboration platform.
• Example: Zoom’s adoption of tiered subscription plans, accommodating individual users up to large corporations.

Productizing IT services results in mutually beneficial outcomes for both businesses and customers. For businesses, it means tapping into new markets and strengthening brand identity, while customers enjoy more straightforward, accessible, and supportive technology solutions. This symbiotic relationship fosters a positive business ecosystem conducive to ongoing innovation and customer-focused growth.

• Benefits for the Business:
  • New Revenue Streams: Productizing IT services opens up diverse income channels, extending beyond traditional service models.
    • Example: John Deere’s foray into precision agriculture technology.
  • Improved Market Positioning: Productized IT solutions can elevate a company’s standing in the industry, distinguishing it as an innovator.
    • Example: Nike’s entry into fitness apps positioned it at the intersection of technology and lifestyle.
  • Brand Value Enhancement: Transforming IT services into products can significantly boost a company’s brand recognition and customer loyalty.

Example: BMW’s connected car services enhanced its image as a provider of advanced mobility solutions.

• Benefits for Customers:
  • Clarity and Transparency: Productized IT offers well-defined features and pricing, making it easier for customers to understand what they’re purchasing.
    • Example: DuPont’s Tyvek tracking systems offer detailed product journey information.
  • Enhanced Accessibility: Customers gain easy access to advanced features and services.
    • Example: Philips’ transition to smart lighting solutions controlled by mobile apps.
  • Improved Support: Standardized IT products often come with comprehensive and specialized customer support.
    • Example: Whirlpool’s smart appliances with remote diagnostics provide efficient troubleshooting.

Productizing IT services involves navigating challenges related to understanding market needs, ensuring product quality, and complying with industry standards. Successful productization requires a balance between innovative development and adherence to quality and regulatory standards. Addressing these challenges effectively can lead to the creation of IT products that not only meet market demands but also uphold the highest standards of quality and compliance.

• Market Research and Customer Needs:
  • Conduct extensive market research to identify and understand the demand for productized IT services.
  • Align product development with current and future customer expectations and requirements.
  • Example: Research might reveal a demand for cloud-based project management tools, guiding product development.
• Quality Assurance and Compliance:
  • Implement rigorous quality assurance processes to ensure product reliability, security, and performance.
  • Adhere to industry standards and regulations, especially for products handling sensitive data.
  • Example: A company like Toyota applies its commitment to quality in manufacturing to its IT products like the Smart Key Box.
  • Example: Epic Systems ensures its healthcare IT products comply with patient privacy laws like HIPAA.

The future of productized IT is poised for significant innovation and transformation. AI and cloud computing will play pivotal roles, leading to smarter, more integrated products. This evolution will democratize access to advanced technology, enabling businesses of all sizes to leverage the latest IT advancements. The growing trend towards customizable standardization and the increasing dominance of subscription models will shape the IT market, fostering a dynamic and accessible technology landscape for businesses and consumers alike.

• Emerging Trends in IT Productization:
  • Artificial Intelligence (AI): AI’s integration into productized IT is creating smarter, more adaptive solutions. AI-driven analytics and machine learning models are increasingly offered as standardized products.
  • Cloud Computing: Continues to drive IT productization with scalable ‘as-a-service’ offerings, including Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).
  • IoT and Edge Computing: Internet of Things platforms are being productized, offering integrated solutions for data collection and edge analytics.
  • Adaptive Cybersecurity Products: The evolution of cybersecurity threats is met with equally adaptive, AI-driven productized security solutions.
• Predictions for the IT Market:
  • Customizable Standardization: An emerging trend where productized IT solutions offer standardization with options for customization.
  • Democratization of Advanced Tech: Small businesses will have increased access to advanced technologies, traditionally available only to larger enterprises.
  • Integrated Service Ecosystems: Future IT products are likely to offer deeper integration with other services, forming comprehensive ecosystems.
  • Dominance of Subscription Models: Predicted to become the standard due to their predictability and continuous update benefits.